TIDMAVG
RNS Number : 4127D
Avingtrans PLC
26 June 2019
26 June 2019
Avingtrans Plc
("Avingtrans" or the "Company" or the "Group")
Trading Update and Notice of Results
Avingtrans PLC (AIM: AVG), which designs, manufactures and
supplies original equipment, systems and associated aftermarket
services to the energy and medical sectors, provides an update in
respect of its financial year ended 31 May 2019 ("FY19").
Avingtrans is pleased to report a year of excellent trading
progress; as a result of which, the Company anticipates that
turnover, operating profit and Profit Before Tax for FY19 will be
ahead of market expectations. The Group expects to report turnover
of c.GBP104m, which includes c.GBP3m of adjustments arising from
the impact of IFRS 15; being c.8% ahead of expectations on an
adjusted basis. At the operating level, Avingtrans expects to
report an operating profit of c.GBP5.8m (pre-exceptionals), being
c.18% ahead of expectations when taking into account an uplift of
GBP100,000 resulting from the impact of IFRS 15. Finally, when
adjusted for the impact of certain restructuring costs, Avingtrans
expects to report PBT (pre-exceptionals) of c.GBP5.2m; c.21% ahead
of expectations.
The Group expects FY19 net debt to be c.GBP1.9m. This represents
a material improvement in comparison to the expected year end
position, reflecting receipt of certain contract payments earlier
than expected and some capex delays; the phasing of which is
expected to have a corresponding impact on the Company's FY20 net
debt position. Taking this into account, the expected 'normalised'
FY19 year-end net debt position would be c.GBP4.5m, which is
nonetheless materially better than previous expectations.
The Group' has seen sustained development and improvement in
performance of the Hayward Tyler ("HTG") business, acquired in
September 2017, throughout the year. The Engineered Pumps and
Motors division (EPM) has secured a number of key contracts,
including over $3m to provide high temperature molten salt pumps in
September 2018; a GBP10m contract with Vattenfall in Sweden for
nuclear life extension equipment, won in February 2019 and over $6m
to provide critical pumps and spare parts to nuclear reactors in
the US and South Korea in April 2019. As part of the division's
global business strategy and to support continued growth,
Avingtrans opened a new state of the art factory in Kunshan, China
in January 2019.
Avingtrans continues to benefit elsewhere from the integration
of HTG, with Peter Brotherhood securing an order to supply steam
turbines for a Floating Production Vessel worth GBP10m in March
2019 and joint initiatives between Peter Brotherhood and Metalcraft
resulting in a contract with a UK Government agency worth GBP5m in
June 2018. Other large contracts have progressed positively,
including further deliveries to Sellafield Ltd for the
three-metre-cubed 3M3 box production programme, relating to the
storage of intermediate level nuclear waste.
A continued focus on aftermarket (AM) has resulted in almost
half of all new orders being for AM opportunities across the
Group.
Continuing its Pinpoint-Invest-Exit strategy, Avingtrans added a
number of bolt-on acquisitions in the year, including Tecmag, Inc.
in October 2018; adding expertise in Magnetic Resonance Imaging and
Nuclear Magnetic Resonance systems to the Group's developing
Medical division. In June 2019, the Company announced the
acquisition of Bolton-based Booth Industries Limited, a leading UK
engineering company, from the administrators of AIM-quoted Redhall
Group plc, with significant read-across to the Group's Metalcraft
operations.
Finally, Avingtrans is pleased to confirm it acquired US-based
Energy Steel & Supply Co. (Energy Steel), an established
manufacturer of machined products and components to the civil
nuclear power industry, on 24 June 2019 for $1m. Hayward Tyler has
over 600 pumps in active service in nuclear applications across the
world and this acquisition expands the Company's nuclear
capabilities and product lines for new and existing customers.
Avingtrans anticipates that these acquisitions, when taken
together, will positively impact the Group's revenue forecast for
FY20, with the impact on profitability expected to deliver in FY21
and beyond.
Notice of Results
Avingtrans will publish results for the twelve months ended 31
May 2019 on 18 September 2019.
The management team will be hosting a presentation for analysts
on the day of results at 9.30am at the offices of Newgate
Communications, Sky Light City Tower, 50 Basinghall Street, London,
EC2V 5DE.
Steve McQuillan, CEO of Avingtrans, commented: "Avingtrans has
had another solid year of growth across our core divisions and I am
pleased to announce the Company expects turnover, operating profit
and PBT to be ahead of market expectations.
"This is attributable to both the significant contract wins we
have delivered on both sides of the Atlantic in the last 12 months
and to the success of Pinpoint-Invest-Exit strategy. Importantly,
the future looks bright for our business. The acquisitions of
Tecmag, Booth Industries Limited and Energy Steel look set to
position us strongly for the future and are anticipated to
positively impact the Group's revenue forecasts for FY20, and
profitability in FY21 and beyond."
Mike Turmelle, Managing Director of the Engineered Pumps and
Motor Division, commented: "Hayward Tyler's vision, with the
support of Avingtrans, is to bring world class products to the
markets we are engaged in. The acquisition of Energy Steel is yet
another example of us developing this vision as it further expands
our nuclear capabilities and product lines for both new and
existing clients."
Enquiries:
Avingtrans plc
Steve McQuillan, CEO
Stephen King, CFO 0135 469 2391
N+1 Singer (Nomad and Broker)
Shaun Dobson/Lauren Kettle (Corporate
Finance)
Mia Gardner/Rachel Hayes (Corporate
Broking) 020 7496 3000
Newgate Communications (Financial
PR)
Adam Lloyd
Tom Carnegie 020 7653 9850
About Avingtrans
Avingtrans designs, manufactures and supplies original
equipment, systems and associated aftermarket services to the
energy, medical and industrial markets worldwide.
Business units
Hayward Tyler - Luton & East Kilbride, UK and USA, China and India
Specialises in the design, manufacture and servicing of performance-critical
motors and pumps for challenging environments.
Stainless Metalcraft Ltd - Chatteris, UK and Chengdu, China
Provider of safety-critical equipment for the energy, medical, science and
research communities, worldwide, specialising in precision pressure and
vacuum vessels and associated fabrications, sub-assemblies and systems.
Maloney Metalcraft Ltd - Aldridge, UK
Designs, manufactures and services oil and gas extraction and processing
equipment, including process plant for dehydration, sweetening, drying and
compression.
Ormandy Group, Bradford, UK
Design, manufacturers and servicing of off-site plant, heat exchangers and
other HVAC (heating, ventilation and air conditioning) products
Peter Brotherhood - Peterborough, UK
Specialises in the design, manufacture and servicing of performance-critical
steam turbines, turbo gen-sets, compressors, gear boxes and combined heat
and power systems.
Composite Products Ltd - Buckingham, UK
Centre for composite technology, parts and assemblies, serving customers
in industrial markets.
Scientific Magnetics - Abingdon, UK
Designs and manufactures superconducting magnet systems and associated cryogenic
systems for a variety of markets including MRI and provides service and
support for Nuclear Magnetic Resonance instruments.
Tecmag Inc, Houston, USA
Designs, manufactures, tests and installs instrumentation, including full
consoles, system upgrades, and solid-state probes, mainly for Magnetic Resonance
Imaging (MRI) and Nuclear Magnetic Resonance (NMR) systems.
Crown International Ltd - Portishead, UK
Designs and manufactures market-leading pole and support systems for roadside
signage and safety cameras, rail track signalling and gantries.
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END
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